But before you write a good business plan, it’s important to understand what the objective of a plan is. A clear and well-defined business plan will cover all the important milestones when you start your business and acts as a blueprint on which you can build, monitor, reflect and improve.

With that in mind, here are 5 questions every effective business plan should answer:

What does your business do?

This question is not as simple as it may seem. You need to really zero in on your niche so that customers know what to expect from your service. For example, let’s say you’re a tree surgeon looking to provide a standard tree-surgery service: pruning, hazard assessments, etc. But later you realize you’re capable of landscaping and designing gardens which could attract a bigger customer base and increase your profits. You have to now adjust your stance from “Tree Surgery Service” to something like, “Garden Designer and Tree Care”. Be clear in your definition in order to tap into your market effectively.

Do you know your customers?

Imagine that a filmmaker was assigned to pitch a script to a studio. He wrote the script with expletives and violence galore, only to realize it was supposed to be a PG-rated movie. The studios will not be giving the green light to his hard work and instead, he’ll have to return to his desk to start over.

In business, if you don’t know who your target audience is, you’re in trouble. You’ll be left with a shelved product because you’re not calling out the right names! Knowing your market can help you tailor your design and product development to align with their specific wants and needs. Understanding your customers will also help you fine-tune your marketing strategy so that you “speak to them” in their voice. Always run a thorough marketing research strategy as you can never know too much about your customer.

How will you target your customers?

Unlike yesteryear, contemporary businesses can reach out to their customers in a variety of ways. Your business plan should outline the various marketing strategies and mediums through which you’ll reach out to your customers. You have an endless amount of options, including websites, social media (start-ups can get significant traction from social media campaigns), newspaper ads, billboards, signs, and posters.

Even if you’re a brick and mortar company, you should be utilizing social media and the internet to digitally “display your shop sign”. For instance, people use platforms like Gumtree and Yelp because they’re relevant to their local area, and will most likely be seeking local services.

How will your business make money?

A lot of start-ups fail because they didn’t create a business model. An effective and clear business model tells you how your company will make money: the journey from product or service, to conversion. Your business plan should indicate the sources and manner in which your profits will be generated.

For example, astute hairstylists running their own salon will soon realize that they can boost their bottom line by selling the very products they use on customers. It’s a bit like an add-on to their conventional hairstyling service.

If you know exactly how your business is intending to make money, the chances are you’ll be more successful than an unsure entrepreneur.

What is your operating budget?

The financial section of your business plan should outline some crucial numbers, such as your operating budget. Your operating budget will reveal how much it will cost you to run your business on a month by month basis, and how much your business should be earning in order to stay in line with your outgoings.

In order to conjure up a figure, you’ll have to decide on a number of contributing factors: where you’ll do business (location), what type of equipment you’ll need, the number of staff you’ll need to hire, a budget for your marketing campaign, etc.

If you can clearly answer these questions, then it’s likely you’ll end up with a valuable blueprint for running your business. And with 5.6 million registered SME’s (small to medium enterprises) in 2018, you’ll need to ensure your company follows a clear and effective business plan in order to stand out from the competition.

For further information and expert guidance towards getting your business off the ground, contact Mint Formations today.

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